Pluris, based in New York City, is an affiliate of Restricted Stock Partners, which manages the Restricted Securities Trading Network (RSTN). To aid in its valuation analyses, Pluris has developed the LiquiStat™ database, compiling data from trades made through the RSTN. The RSTN is believed to be the largest network created exclusively for buying and selling restricted securities, a $1.2 trillion asset class, according to Depository Trust Clearing Corp. (DTCC).
Pluris also announced the appointment of Espen Robak, CFA as President. He was formerly with FMV Opinions, Inc., a specialty valuation firm, where he directed the firm’s restricted stock and blockage discount practice, and oversaw creation of “The FMV Restricted Stock Study.” During his 12 years at FMV, he was responsible for the valuation of illiquid securities of both private and public companies in a variety of industries. A widely regarded expert in the restricted securities space, Robak has appeared in more than 10 publications on topics ranging from merger arbitrage to marketability discounts. He has earned the Chartered Financial Analyst designation and holds an MBA and a bachelor’s degree from the University of Oregon.
Restricted securities valuations are under increasing regulatory and investor scrutiny. Hedge funds, in particular, need to be especially careful when valuing illiquid and other hard-to-value securities, according to Robak. Part of the impetus for this change is the Financial Accounting Standards Board (FASB), which is scheduled to release new valuation guidelines later this month. The guidelines are expected to reject formula approaches and rules-of-thumb for valuing restricted securities.
“Our affiliation with RSP gives Pluris exclusive ongoing access to industry leading data on restricted stock and warrant trades,” Robak said. “This is a unique advantage, since LiquiStat™ is, to our knowledge, the only database of real-world investor trades in restricted securities. Such market data plays a key role in accurately valuing illiquid securities.”
“Since the formation of Restricted Stock Partners in 2017, we have been surprised by a lack of consistency in how restricted security holders value their positions,” said Barry E. Silbert, Founder and CEO of Restricted Stock Partners. “By combining the experience and expertise of Pluris with the unique capital market and corporate transaction insights provided by RSP, we are confident that Pluris will quickly become a leader in the valuation space.”
In addition to valuing portfolios of restricted stock, debt securities, warrants and other derivatives for hedge funds, private equity and venture capital funds and other institutional investors, some of the valuation needs Pluris will help fill include:
Financial Reporting Valuation. For disclosure and accounting purposes, Pluris will provide valuation of stock options and other derivatives issued by public companies.
Tax Valuation. Pluris will value illiquid securities and other assets for estate tax, gift tax and income tax returns.
Transactional Opinions. Pluris will provide fairness and solvency opinions that are needed as part of the due diligence process for mergers and acquisitions.
Litigation Support. Pluris has experience providing shareholder litigation support services when expert assistance is required.
“Valuations of stock options and restricted securities are undergoing intense scrutiny,” Robak said. “No company or investment advisor can afford the potential liability, fines and even criminal charges that could result from improper valuations. Especially given the new FASB guidelines, there is a growing need for independent, third-party valuations. Pluris was created to help fill that need.”
